Metro SCADA installation treated as works contract and original work, falling within the railway-related GST entry.

A composite supply for designing, supplying, erecting, installing, testing and commissioning a metro SCADA system was treated as a works contract because the arrangement involved installation of equipment and systems intended to remain permanently attached and to function as part of the metro corridor's operational electrical network. The new installation was also regarded as original work, since it was neither repair nor maintenance of an existing structure. On that basis, the supply was considered to pertain to railways, including metro, and therefore fell within Entry 3(v)(a) of Notification No. 11/2017-Central Tax (Rate).

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Issues: Whether the applicant's composite supply of designing, supplying, erecting, installing, testing and commissioning the SCADA system for the metro corridor was a works contract; whether it constituted original work; and whether it was a supply pertaining to railways, including metro, so as to fall under Entry 3(v)(a) of Notification No. 11/2017-Central Tax (Rate).

Analysis: The supply involved a composite arrangement of goods and services, including site survey, design, wiring, cable laying, civil works, installation, testing and commissioning. A supply becomes a works contract only if it involves construction, erection, commissioning or installation of immovable property with transfer of property in goods in execution of the contract. Applying the concepts of immovable property, attachment to earth and permanent fastening, the installed SCADA network, with interlinked equipment, cables and control systems meant for continued use in the metro corridor, was held to have lost its movable character and to amount to erection and commissioning of immovable property. The supply was also treated as original work because it was a new installation and not repair or maintenance of an existing structure. Further, the SCADA system controlled and monitored the metro's electrical network and power supply and distribution arrangements, bringing it within the meaning of a supply pertaining to railways, including metro.

Conclusion: The supply was held to be a composite supply of works contract involving original work pertaining to railways, including metro, and was taxable under Entry 3(v)(a) of Notification No. 11/2017-Central Tax (Rate).

Final Conclusion: The application succeeded and the ruling recognised the SCADA contract as taxable under the specified works contract entry applicable to railway-related original works.

Ratio Decidendi: A composite supply involving installation of equipment and systems that are intended to remain permanently attached to the earth and form part of a metro's operational electrical network is a works contract and, if it is a new installation for the metro system, qualifies as original work pertaining to railways.

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